Understanding & Buying Title Insurance

As a homeowner, you’ve probably heard of title insurance. But what is it and do you really need it? In short, yes. It is highly recommended that you get title insurance, since it will protect you from outside ownership claims. Here’s what you need to know:

If you are planning to sell your home in the future, it’s important that you get title insurance. For one, it helps a buyer know that the property they want to buy has a good and marketable title. It also assures them that no one else has claims on the house like an ex-spouse. You must remember that title insurance is not the same as a warranty of title.

Use Caution When Buying Title Insurance

Even though title insurance is required by your lender, you still have to shop around for the title insurance that’s best for you. Sometimes, buyers get title insurance as part of their closing costs but that can be expensive—especially if they go with the company the seller recommends. That’s why it’s recommended that you choose your own title company.

Make Sure You Choose the Title Company

When you purchase title insurance, you have the right to select the company it will come from. Purchase from a company that is different than that of your home’s previous owner. The reason being, many companies only search for summaries of a title record and not the actual record. This can cause confusion if researchers look back at past records and mistake the previous owner’s records for yours. Buyers have been known to lose their homes thanks to this kind of mistake. So get your title insurance from a different company so you can have a clean slate.

The information provided on these posts have been prepared by a third party company and have been distributed for education purposes only. The positions, strategies or opinions of the authors do not necessarily represent the positions, strategies or opinions of Guild Mortgage Company or its affiliates. Each loan is subject to underwriter final approval. All information, loan programs, interest rates, terms and conditions are subject to change without notice. Always consult an accountant or tax adviser for full eligibility requirements on tax deduction.